The big boys on the block

Deutsche Telekom: Europe's largest telecommunications company, and considered a good bet by some. The company has a market capitalisation of around €114 billion (£90 billion). Analysts say it is regaining market share in the mobile market and is strong in the Internet area, but has seen price erosion in both fixed and mobile due to competition.

France Telecom: Still majority-owned by the French state, with a market capitalisation of around €85 billion (£67 billion), the company is considered undervalued by some analysts. It is reducing its payroll, and has seen an improvement in its margins on mobile calls. On the downside, analysts say its international assets may be too diverse.

Telecom Italia: Still reeling from the shock of being the object of a hostile takeover bid by a smaller Italian company, Olivetti, last month, most analysts rate the former state monopoly a buy. It has a market capitalisation of about €67 billion (£53 billion) and is considered still to have room to make savings by cutting costs and disposing of non-core assets.

Telecom Italia Mobile (TIM): Quoted separately from Telecom Italia, its sister company, TIM, is the largest mobile phone company in Europe with a market capitalisation of around €50 billion (£39 billion). Some analysts rate it a buy, but some worry about the possibility of a future merger with Telecom Italia on unfavourable terms.

Telefonica: The Spanish incumbent with a market capitalisation of €40 billion (£31 billion), the firm has invested in Latin America and is regarded by some brokers as undervalued. The company has begun to reduce staff numbers and boost growth of its mobile service, but also faces increased competition in both fixed and mobile.

KPN: The Dutch incumbent, which along with Sweden's Telia holds a stake in Telecom Eireann, is seen by some analysts as a buy. The firm has a market capitalisation of around €22 billion (£17 billion), recently signed a joint venture agreement with the US telecommunications company, Qwest, and is considered a possible acquisition target.